6. Acquisitions of Subsidiaries, Associates and Non-Controlling Interests
The following acquisitions and adjustments to the purchase price allocation were done in 2015.
For Eyes
On 1 December 2015 the Group acquired 100% of the shares in Aranon Corporation, United States. With this acquisition the Group is entering a new geographical market. Aranon Corporate has a chain named For Eyes that operates 116 own stores mostly in the areas of Chicago, Washington DC, Philadelphia, Florida and California. The Company paid €129,700 (USD 141,289) and based on the initial purchase price allocation an amount of €139,157 is identified as goodwill and represents the future synergies, expected growth and profitability of the business. Due to the limited time between the acquisition and the publication of the financial statements, the purchase price allocation has not yet been finalized.
Other store acquisitions
During 2015 the Group acquired 39 stores in the segments G4 and Other Europe. These acquisitions were recognized using the acquisition method. After the initial allocation of the consideration transferred for the acquisitions of the assets, liabilities and contingent liabilities, an amount of €6,227 was identified as goodwill. The goodwill is attributable to the high profitability of the acquired business and the expected synergies following the integration of the acquired business into our existing organization. The goodwill mainly comprises the skilled employees and the locations of the acquired stores, which cannot be recognized as separately identifiable assets. The purchase price allocation has been completed for most of the stores acquired.
Adjustment to purchase price allocation
The Group finalized the purchase price allocation for the acquisitions done in 2014 in Italy (Randazzo), the United Kingdom and Peru. This resulted in a change in the value of recognized intangibles and recognition and derecognition of certain assets and liabilities and accordingly the recognized goodwill decreased by €3,239.
in thousands of EUR | For Eyes | Other stores | Adjustments to purchase price allocation | Total |
|---|---|---|---|---|
Property, plant and equipment | 5,177 | 311 | 414 | 5,902 |
Other intangible assets | 25,100 | 3,654 | - 3,286 | 25,468 |
Deferred income tax assets | 2,129 | 11 | 267 | 2,407 |
Other non-current assets | 261 | 240 | 26 | 527 |
Inventories | 3,073 | 641 | - | 3,714 |
Trade and other receivables | 1,708 | 253 | - 814 | 1,147 |
Current income tax receivables | 28 | - | - | 28 |
Cash and cash equivalents | 1,917 | 565 | - | 2,482 |
Deferred income tax liabilities | - 9,897 | - 260 | 1,111 | - 9,046 |
Other non-current liabilities | - | - | 26 | 26 |
Current income tax liabilities | 9 | - 62 | - 8 | - 61 |
Trade and other payables | - 38,115 | - 468 | - 696 | - 39,279 |
Current borrowings | - 847 | - 21 | - | - 868 |
Fair value of acquired net assets and liabilities | - 9,457 | 4,864 | - 2,960 | - 7,553 |
Consideration paid in cash and cash equivalents | 129,700 | 10,861 | - | 140,561 |
Consideration to be transferred | - | 230 | - 6,199 | - 5,969 |
Total consideration transferred or to be transferred | 129,700 | 11,091 | - 6,199 | 134,592 |
Consideration paid in cash and cash equivalents | 129,700 | 10,861 | - | 140,561 |
Cash and cash equivalents and bank overdrafts at acquired subsidiary | - 1,917 | - 565 | - | - 2,482 |
Outflow of cash and cash equivalents net of cash acquired | 127,783 | 10,296 | - | 138,079 |
Total consideration transferred or to be transferred | 129,700 | 11,091 | - 6,199 | 134,592 |
Fair value of acquired net assets and liabilities | - 9,457 | 4,864 | - 2,960 | - 7,553 |
Goodwill | 139,157 | 6,227 | - 3,239 | 142,145 |
The goodwill amortization in United States is not tax-deductable.
The acquisitions contributed the following in revenue and net result for the Group:
in thousands of EUR | For Eyes | Other stores | Adjustment to purchase price allocation | Total |
|---|---|---|---|---|
Revenue | 6,626 | 11,768 | - | 18,394 |
Net result | - 3,092 | 2,047 | - | - 1,045 |
Had the acquisitions been consolidated for the full year, revenue and net result would be:
in thousands of EUR | For Eyes | Other stores | Adjustment to purchase price allocation | Total |
|---|---|---|---|---|
Revenue | 83,126 | 21,586 | - | 104,712 |
Net result | - 18,833 | 3,426 | - | - 15,407 |
Aquisitions costs for the above acquisitions amount to €2,113 and are included in the general and administrative costs in the Income Statement.